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Lanka’s economy shrank by record 7.8 percent last year

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(Al Jazeera)Sri Lanka’s crisis-hit economy shrank by a record 7.8 percent last year, official data shows, as the country struggles with its worst financial crisis in seven decades.

The island’s fourth-quarter gross domestic product (GDP) contracted by 12.4 percent, according to the figures released by the state-run census and statistics department on Thursday.Sri Lanka’s growth is expected to shrink by 3 percent this year, Moody’s Investors Service said on Monday but growth is expected to rebound in 2024.

An unprecedented economic crisis sparked huge protests in the island nation, culminating last July when a mob stormed the home of then-President Gotabaya Rajapaksa, forcing him to flee the country and resign.Since then, a new government has worked to repair Sri Lanka’s battered public finances and secure a sorely needed International Monetary Fund (IMF) bailout.

Last year’s contraction – the biggest in the country’s 75 years of independence – compared with 3.5 percent growth in 2021 and a 4.6 percent contraction in 2020 as the coronavirus pandemic hit.It was “caused by the deepening of the economic crisis … frequent power disruptions, shortages in fuel, raw materials, (and) foreign currency”, the census and statistics department said in a statement.

The data showed some improvement in Sri Lanka’s fiscal position with inflation moderating to about 50 percent in February, down from a record high of 69.8 percent in September.President Ranil Wickremesinghe has raised taxes and ended generous subsidies on fuel and electricity to boost government revenue after his predecessor defaulted on Sri Lanka’s $46bn foreign debt last year.

The reforms are a precondition of a $2.9bn rescue package from the IMF, which Sri Lanka expects to finalise next week.But the tax and price hikes have been roundly unpopular, triggering protests and industrial stoppages around the country.

About 40 trade unions warned on Thursday they planned a general strike next week if their demands for concessions on the austerity programme were not met.Sri Lanka aims to announce a debt-restructuring strategy in April and step up talks with commercial creditors ahead of an IMF review of a bailout package in six months, its central bank governor said last week.

Wickremesinghe has said Sri Lanka can expect to remain bankrupt until at least 2026 and insisted his government has no option but to implement the reforms demanded by the IMF.The census and statistics department said the agriculture sector shrank 4.6 percent last year, while industries contracted 16 percent, and services dropped 2 percent from a year earlier.

Sri Lanka’s economy shrank 11.8 percent in the July-September quarter from a year ago, the second-worst quarterly contraction ever for the country.

“These numbers are broadly in line with expectations. In the last three months of 2022, Sri Lanka was hit by very high inflation, fuel shortages and high interest rates,” said Sanjeewa Fernando, senior vice president of research at Asia Securities.

“For the rest of this year, with IMF funds expected, the central bank should be able to keep the currency strengthened, eventually reduce interest rates, and continue to see inflation ease.”



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We are working to stabilize and restructure an economy that was in disarray -President

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The National New Paddy Harvesting Festival (Aluth Sahal Mangalya), a traditional annual ceremony of offering the first portion of the freshly harvested Maha season paddy to the sacred Sri Maha Bodhi, was held this morning (04) under the patronage of President Anura Kumara Disanayake at the historic Sri Maha Bodhi premises in Anuradhapura.

The ceremony was organized by the Ministry of Agriculture and the Department of Agrarian Services under the theme “In unison, let us cultivate the land, to build a self-sufficient nation” (අහරින් ස්වයංපෝෂිත දැයක් තනන්නට එක මිටට ගොවි බිමට), following the guidance of the Atamasthanadhipathi, the most Venerable Pallegama Hemarathana Nayaka Thera.

This ritual, which dates back to the era of ancient monarchs, saw the participation of farmers from across the country. In accordance with tradition, they prayed for timely rains and fertile fields and invoked blessings for a self-sufficient and prosperous economy through agriculture.

President Anura Kumara Disanayake first paid homage and received blessings from the sacred Jaya Sri Maha Bodhi before joining the ceremonial proceedings.

The sacred procession, which carried the newly harvested paddy from near the historic Sinha Kanuwa in Anuradhapura, arrived at the sandy courtyard (වැලි මලුව) of the Sri Maha Bodhi, marking the ceremonial commencement of the New Paddy Harvest Festival.

The Most Venerable Pallegama Hemarathana Nayaka Thera commenced the ritual by filling the golden bowl with the new paddy, after which representatives from all provinces added paddy from their respective regions, symbolically filling the golden bowl.
President Anura Kumara Disanayake also participated in this ritualistic moment, amidst the chanting of Pirith by the Maha Sangha.

A vessel of pure bee honey, traditionally offered to the Sri Maha Bodhi, was ceremonially presented to the President by Deputy Leader of the Vedda Community U.W.  Bandiyala Eththo.

The vessel of ghee, brought from the historic Saman Devalaya in Sabaragamuwa, was also presented to President Anura Kumara Disanayake, to be used in the customary ghee offering at the Sri Maha Bodhi.

The President also received the commemorative plaque of the National New Paddy Harvest Festival and presented tokens of appreciation to farmer leaders who have made significant contributions to the development of the country’s agriculture sector.

As part of the initiative to secure a pest-free harvest, the President participated in the distribution of pest-resistant seed paddy to farming communities across the provinces.

Addressing the subsequent official ceremony, President Anura Kumara Disanayake stated that the current government is working to transform an economy that was in disarray. He noted that the Paddy Marketing Board is burdened with a debt of Rs. 28 billion, while harvested paddy is being left to spoil in storage.

The President emphasized that the current administration has accepted the responsibility of restoring and restructuring this disorderly system. He added that the government expects the support not only of the state machinery related to agriculture but also of all farming communities. He affirmed the intention to integrate Sri Lanka’s cultural and traditional systems to reclaim the legacy of the agricultural economy and thereby strengthen the national economy.

President Disanayake further stated that the country’s ancient kings achieved greatness through their contributions to agriculture and irrigation and that self-sufficiency in food was a critical factor in that success.

He highlighted that sustainable development has become a global discourse today and that Sri Lanka’s “Tank Cascade System” or “Vapi System,” stands as a remarkable example of sustainable development. The country’s irrigation system, which dates back nearly 2,000 years, continues to contribute to the advancement of agriculture even today.

As such, the government has allocated Rs. 2 billion in the current budget to rehabilitate the irrigation system and renovation work on the North Central Maha Ela Project has already commenced to revitalize the country’s agricultural industry. He added that the government also plans to develop seed farms to produce self-sufficient seeds, while protecting genetic ownership.

He further emphasized the need for fair prices for agricultural produce, both for farmers and consumers. Due to long-standing market distortions, the government will intervene over the next two to three harvesting seasons to ensure both parties receive fair prices.

The President also stated that the necessary provisions for such state interventions have been made in the current budget. Steps have been taken to create storage capacity to hold 300,000 metric tons of paddy, which is expected to mitigate market distortions going forward.

Among those present at the occasion were the Chief Incumbent of the Ruwanweliseya and Chancellor of the Rajarata University, Most Venerable Ithalawetunuwewe Gnanatillake Thera, the Chief Incumbent of the Lankaramaya, Most Venerable Ralapanawa Dhammajothi Thera and members of the clergy; Minister of Agriculture, Livestock, Lands and Irrigation K.D. Lalkantha; Minister of Trade, Commerce, Food Security and Cooperative Development Wasantha Samarasinghe; Governor of the North Central Province Wasantha Kumara Wimalasiri; and Deputy Minister of Agriculture and Livestock Namal Karunaratne, along with a large number of farmer leaders and other dignitaries.

  1. (PMD)
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Indian PM Modi arrives in Sri Lanka on a three day state visit

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(File pic)

Prime Minister of India Narendra Modi arrived in the island a short while ago on a  three-day state visit.

The Indian Prime Minister was received at the Katunayake International Airport by Sri Lanka’s Minister of Foreign Affairs Vijitha Herath.

PM Modi is accompanied by Minister of External Affairs S. Jaishankar, Indian National Security Advisor Ajit Doval, Indian Foreign Secretary and several senior officials of the Government of India.

 

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Special Train Services during Sinhala and Tamil New Year

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The General Manager of Railways has announced that the following special train services will operate during the Sinhala and Tamil New Year period.

1. From Colombo Fort to Badulla – departing Colombo Fort at 1930 hrs on 11th, 12th, 19th and 20th April

2. From Badulla to Colombo Fort – departing Badulla at 1750 hrs on 11th, 12th, 19th and 20th April

3. From Galle to Anuradhapura – departing Galle at 0400 hrs on 12th and 13th April

4. From Anuradhapura to Galle – departing Anuradhapura at 1500  hrs on 12th and 13th April

5. From Colombo Fort to Galle – departing Colombo Fort at 120 hrs on 10th, 11th, 15th and 20th April

6. From Galle to Colombo Fort – departing Galle at 0610 hrs on 11th, 12th, 16th and 21st April

7. From Colombo Fort to Galle – departing Colombo Fort at 1330 hrs on 12th and 13th April

8. From Colombo Fort to Kankasanthurai [Intercity Express] – departing Colombo Fort at 0530 hrs on 11th and 18th April

9. From Kankasanthurai to Colombo Fort [Intercity Express] – departing Kankasanthurai at 1350 hrs on 11th and 18th April

10. From Beliatta to Colombo Fort – departing Beliatta at 0825 hrs on 12th, 13th, 18th, 19th and 20th April

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